Comments
Bond yields fell on Friday as solid US jobs data reinforced the view that the Federal Reserve would raise interest rates gradually, while stock and currency markets were cautious ahead of an Italian constitutional reform vote on Sunday.
Crude futures rebounded on a weaker dollar, resuming a rise sparked by a cut in oil output agreed this week by the Organization of Petroleum Exporting Countries, the first since2008.
The strength of the US November payrolls report had been seen as critical for the Fed to lift rates again for the first time in nearly a year.
“Our view is that, aside from tax and death, a December hike is a certainty and it’s priced into the market at this point,"said Shannon Soccocia, head of asset allocation at BostonPrivate Wealth.
The US unemployment rate slipped to 4.6 per cent last month, its lowest in more than nine years, but wages unexpectedly fell 0.1 per cent, dashing expectations of faster growth in household income that would fire up inflation.
After the wages data, longer-dated US Treasury yields retreated further from the near 1-1/2-year peaks they had reached on Thursday. The benchmark 10-year Treasury note yield was down 4 basis points at 2.399 per cent.
As bond markets took a breather from their massive sell-off since Donald Trump’s US presidential win, global equities were on the back foot as investors took profits on a run-up on bets that Trump would act on his campaign pledges of tax cuts and less regulation, which would spur faster economic growth.
The Dow Jones industrial average fell 21.51 points,or 0.11 per cent, to 19,170.42, the S&P 500 rose 0.87point, or 0.04 per cent, to 2,191.95 and the Nasdaq Composite gained 4.55 points, or 0.09 per cent, to 5,255.65.
For the week, the Dow edged up 0.1 per cent, the S&P 500 fell 1 per cent and the Nasdaq shed 2.65 per cent.
The MSCI world equity index, which tracks shares in 45 nations, edged up 0.04 per cent, to 412.61, marking a 0.6 per cent weekly drop.
Italian referendum
Anxiety over the possibility of Italians rejecting Prime Minister Matteo Renzi’s referendum, which could fuel political instability in euro zone’s third-biggest economy, has caused choppy trading across European markets.
Investors also await to see whether Norbert Hofer of the right-wing Freedom Party might win over former Greens Party leader Alexander Van der Bellen in the Austrian presidential election on Sunday.
Europe’s broad FTSEurofirst 300 index ended 0.3 per cent lower at 1,339.18, bringing its weekly loss to 0.9 per cent.
The euro was down as much as 0.3 per cent at $1.0626 before recovering following the November US jobs report. The euro zone common currency was little changed at $1.0660, ending with a 0.7 per cent gain for the week.
Safe-haven demand ahead of the Italian and Austrian votes pushed the German 10-year Bund yield to 0.280 per cent, down 8 basis points.
The dollar index posted its first weekly fall in a month. It was down 0.4 per cent at 100.66.
A weaker greenback helped reversed the oil market’s initial losses, marking its best week in at least five years.
Brent crude settled up 52 cents or 0.96 per cent at $54.46 a barrel. US crude settled up 62 cents or 1.21 per cent at $51.68.
Spot gold prices rose $4.86 or 0.42 per cent, to$1,175.77 an ounce.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.